Calculate a repayment-capacity scenario
See this course’s project requirements
A fictional funding request with verified uses, owner contribution, cash capacity, loan-term comparison, collateral questions and a go/no-go recommendation.
Keep your working files in your own notebook or software. Save a private description, checklist, and work link in My Proof.
What to include
- A funding-use table and source/term verification questions.
- A balanced or gap-flagged sources-and-uses schedule.
- A repayment-capacity worksheet with numerator definition and downside gap.
- A business-loan term/proceeds/cost scorecard.
- A collateral/guarantee question map for qualified review.
- A completed fictional small-business loan-readiness packet.
Review and revise
Use these criteria to check your work and choose what to improve.
- All supplied records reconcile and the decision uses the named case rules.
- Calculations show units, intermediate values and a second check.
- Changed-input practice revises the affected result and identifies uncertainty.
- The final project combines six lesson records, separates fictional assumptions from current rules, and states a supported next step.
Want more background?
The idea in everyday life
This is an original fictional practice case. No account, payment, personal record or outside participation is required. Fictional annual cash available for debt payments $9,000; all existing+proposed scheduled debt payments $6,000. Owner draws/taxes are already accounted for in the supplied available amount.
A coverage ratio summarizes the supplied cash available for debt payments; it is not a universal underwriting rule.
Calculate a repayment-capacity scenario — worked practice
A coverage ratio summarizes the supplied cash available for debt payments; it is not a universal underwriting rule.
Use paper or a local table; label all amounts as fictional USD unless the case names another unit. Fictional annual cash available for debt payments $9,000; all existing+proposed scheduled debt payments $6,000. Owner draws/taxes are already accounted for in the supplied available amount.
Repayment-capacity scenarios
Paste at A1.
| AScenario | BCash available after owner draws/taxes USD/year | CAll scheduled debt service USD/year |
|---|---|---|
| Base | 9000 | 6000 |
| Stress | 5400 | 6000 |
Copy as plain text
1. Step 1: Define available cash and denominator scope
Define available cash and denominator scope.
You should see: Available $9,000; total scheduled debt service $6,000.
A coverage ratio summarizes the supplied cash available for debt payments; it is not a universal underwriting rule.
2. Step 2: Divide to calculate coverage
Divide to calculate coverage.
You should see: 9000/6000=1.5 times.
Keep this intermediate result so the final decision can be checked.
3. Step 3: Calculate dollar room after debt service
Calculate dollar room after debt service.
You should see: $3,000.
Keep this intermediate result so the final decision can be checked.
4. Step 4: Stress available cash down to $5,400
Stress available cash down to $5,400.
You should see: Coverage 0.9 times and cash shortfall $600; no lender cutoff or approval is asserted.
Keep this intermediate result so the final decision can be checked.
What to finish
A repayment-capacity worksheet with numerator definition and downside gap.
Watch for this
Calling a modeled coverage ratio a guaranteed lender approval.
How can I tell I understand it?
Calculate defined debt-service coverage and test a downside cash scenario on the supplied changed case while preserving the stated rule and checking the final record.
Quick knowledge check
Answer all 3 questions. Get at least 2 right and the lesson completes automatically.
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Answer all 3 questions above and get at least 2 right. You can review the explanations and try again.
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Source & access notes · checked 2026-10-01
Official page opened/read during Money expansion authoring; checked the relevant concept and access state. These sources do not establish funding eligibility.
Access: Readable official webpage inspected with the web reader on 2026-10-01. No interactive-tool operation is claimed.
Reuse: Original fictional practice, questions and calculations; paraphrased concepts with a source link. No source exercise copied.
Source & access notes · checked 2026-10-01
Official page opened/read during Money expansion authoring; checked the relevant concept and access state. These sources do not establish funding eligibility.
Access: Readable official webpage inspected with the web reader on 2026-10-01. No interactive-tool operation is claimed.
Reuse: Original fictional practice, questions and calculations; paraphrased concepts with a source link. No source exercise copied.
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